From the story:
The charges would be the most significant attempt at an enforcement action by government lawyers against high-ranking executives involved in Southern California's massive mortgage lending meltdown that presaged the nation's current economic crisis.DJ stories are behind a steep pay wall, thus no link to the full story.
Once the nation's largest home lender, Countrywide has become synonymous with exotic lending practices that ultimately became unsustainable. Countrywide, now part of Bank of America, shifted away from traditional fixed-rate mortgages toward riskier loans such as subprime and adjustable rate mortgages in recent years. Investigators are paying particular attention to a loan program in which Countrywide allowed borrowers to pay less than the minimum monthly interest due on their loans, the sources said.
About a month ago, lawyers for Mozilo and his successor David Sambol both received phone calls offering a final opportunity to make their case with SEC staff who are investigating the matter. The offers, informally known as "pre-Wells" notices, can be precursors to actual "Wells notices," formal written letters from the SEC notifying individuals that formal charges will be recommended to the Commission. A final decision on whether to file charges could take at least two months, the sources said, and the executives' lawyers could have another opportunity to meet with the commissioners before the decision is made.